Urban Poverty and Inequality in Jakarta

The picture was taken by John Kots in June 2006 and his comment on this picture was as follows:

This struck me as typical Jakarta: modern towers amidst great poverty. The contrast between rich and poor is very pronounced in this very interesting megalopolis.

The picture reveals two different worlds that take place in one location. Despite a robust economic growth, Jakarta is still a place of poverty. There is no doubt that that poverty is an intractable problem in Indonesia. War on poverty has been initiated long way back since the New Order regime. A variety of alleviation programs have been implemented, but the way to prosperity is still a long way to go. Not to mention rural poverty, the poverty in Indonesia's urban areas has been a problem for many years.

Another picture is presented below to clearly illustrate the extent of poverty of a neighborhood in the river bank in Jakarta. The picture was taken by Muhammad Husni Thamrin on November 2003 showing a very poor neighborhood on the river bank of Ciliwung in the subdistrict of Manggarai, Central Jakarta. This kind of neighborhood was also blamed as the culprit of the recent floods in Jakarta.


Indonesia until the 1997 Asian financial crisis is one of remarkable economic success, one that has captured the attention of many experts and policy makers. From a steep recession in 1965 (8 percent decline in GDP), the country’s economic development took off in the seventies, earning tremendous windfalls benefits from oil shock. This bonanza development carried over throughout the eighties and into the nineties despite the oil counter-shocks. From 1985 through 1995, the GDP rose at an average rate of 7.1%.

In line with Indonesia's economic growth, the percentage of urban population living under poverty line decreased significantly from 38.8% in 1976 to 9.7% in 1996. The number of urban population living under line poverty decreased from 10.0 million in 1976 to 7.2 million in 1996. However, when the economic crisis struck Indonesia since mid 1997 the number of urban population living under poverty line in 1998 increased sharply to 17.6 million or 21.9% of the total urban population. The poverty line was determined by the expenditure needed to meet the minimum cost of living. It varies by year and location. These poverty lines are still less than the poverty line determined by the World Bank which is $2.00 a day.

In order to recover from the economic crisis, a variety of urban alleviation programs were implemented including social safety net program. These programs have been able to reduce the number of poor people in Indonesia. The number of urban population living under poverty line in 2005 decreased to 12.4 million or 11.4% of the total urban population. The proportion of urban poor in 2005 decreased but the number of urban poor in 2005 is still more than that in 1976. The influx of rural poor who moved to urban areas contributes to the increasing number of urban poor in Indonesia.

In 2002 there were 286,900 poor people in Jakarta and it accounted for 3.4 per cent of the population of Jakarta. It is the least proportion of poor population among other provinces in Indonesia. The proportion of poor population in Indonesia in 2002 was 18.2 per cent. The highest proportion of poor population was in Papua (41.8 per cent). The robust economic growth of Indonesia has mostly benefited the resident of Jakarta including urban poor. Other areas in Indonesia still have high proportion of poor population. The economic growth has less impact on poor people in other regions of Indonesia. It is just another saddening evidence of how the dominance of Jakarta costs other regions of Indonesia.